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Congress should act quickly to keep student loan interest rates from doubling, Sen. Jon Tester, D-Mont., said Wednesday.

Tester said in a conference call with Montana reporters that freezing interest rates should be a bipartisan effort, and it should be done in a way that doesn’t add to the national debt.

“We need to continue to make college accessible,” Tester said, not only so that students aren’t “overwhelmed by student loans,” but also so that the nation has the educated workforce to compete worldwide and build a strong economy.

Unless Congress takes action, the interest rate on Stafford loans for more than 7 million low- and middle-income students will double July 1 from 3.4 to 6.8 percent.

The White House estimates that would add an average of $1,000 to how much students must pay back over the life of a loan.

Tester said he hopes students all over the country will talk to their representatives in Congress about their real-life experiences and why the interest rate needs to be frozen. He added he expects the matter to come up for a vote in May.

“We should put politics aside,” Tester said. “This is too important to be … a political tool.”

At Montana State University, students took out more than $36 million in all types of student loans last year. Most MSU students – 66 percent – borrowed, and the average debt for all student borrowers was $25,682, according to MSU’s website.

Kiah Abbey, MSU student president, said students are concerned about the loan issue. “Absolutely. It directly affects us.”

This year 6,100 students received subsidized Stafford loans with interest at 3.4 percent, said Tracy Ellig, MSU news service director. That means half of MSU’s undergraduates received federal loans that are based on need. Unsubsidized Stafford loans already charge 6.8 percent interest and, unlike subsidized loans, the federal government doesn’t pick up the interest while students are in school.

State University System leaders are concerned because more Montana students are borrowing, they are taking on more debt, graduates are leaving deeper in debt and more are defaulting.

President Barack Obama has been touring the country this week, speaking to college students and appearing on late-night TV host Jimmy Fallon’s show, to call on Congress to freeze the student loan rate. Former Massachusetts Gov. Mitt Romney, the leading Republic presidential candidate, has also endorsed the idea of a temporary freeze. Both parties are competing for college voters.

With both presidential candidates supporting a freeze, Tester said, “the biggest scrap is how are we going to pay for it?”

The interest freeze would cost about $6 billion.

Democratic Senate leader Harry Reid put out a proposal Tuesday, which would close a tax loophole for some private business owners, to freeze student loan rates for one year. That would affect smaller corporations, including lawyers’ and doctors’ businesses, with incomes over $250,000, by making it harder to avoid paying Social Security or Medicare taxes on some of their income, the Associated Press reported.

Republicans criticized that proposal for raising taxes on small business owners and “raiding” Social Security and Medicare funds.

Rep. Denny Rehberg, R-Mont., who will challenge Tester for the Senate seat in November, issued a statement Wednesday saying he will “support a fiscally responsible effort to prevent student loan interest rates from going up, but that’s just the first step. We’ve also got to do a lot more to make sure this generation of college grads has the same opportunities as generations before, and that means getting America’s fiscal house in order.”

Rehberg also called it “hypocritical for the big-spenders in Washington to decry an increase in student loan rates, while saddling the very same graduates with an additional $5 trillion in national debt.” Rehberg said he has two kids through college and another heading there, so he understands the pressures of paying for college.

Tester said he graduated from college debt-free because his parents helped, he lived with friends and relatives, and he worked. But he couldn’t afford to pay today’s higher cost of college for his own kids, who did graduate with student loan debt.

“Things have changed in the last 30 or 40 years, and not for the better,” Tester said, adding that many middle-class kids could not afford college without student loans.

Gail Schontzler can be reached at gails@dailychronicle.com or 582-2633.

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